Business & Money - Angel Reyes Blog

Super Blogging Not For Sissies

Angel Reyes — Mon, 16 Nov 2009 16:10:55 -0600

There’s amateur blogging, there’s pro blogging and then there’s “super blogging.” Here at AngelReyesBlog.com, when a news article comes out about a dangerous product, 18-wheeler accident or even an award I've won, I blog about it. But for the Super Bloggers, blogging takes on a whole new meaning. Honestly, I don’t know how they do it! These people are obviously very committed to their task, and you’ve got to admire them for that. It takes a lot of courage, time, effort and intellect to be a true Super Blogger. You’ve gotta be tough and more often than not, you’ve gotta be rough.

When it comes to Super Blogging, I’d say no one does it better than Brian Cuban, and his blog The Cuban Revolution. Brian isn’t just Mark Cuban’s brother; he’s a celebrity in his own right. Brian’s taken a lot of heat from many of his posts, but as any good shock jock will tell you, without controversy, you’ve got no audience. Let’s use this one as an example:

http://www.briancuban.com/the-idiots-guide-to-islamophobi/

]]>As you can see, there are no holds barred when it comes to telling Debbie Schlussel, a highly controversial super blogger in her own right, what’s what. For example, let’s take this quote: “You are a pillar of the community Debbie. A community of racist, bigoted hate mongering Islamophobes.” I’m sure you’ll agree that Brian’s passion for fighting racism and religious bigotry comes through loud and clear.

But super blogging doesn’t stop with a controversial post. You’ve got to get comments from your readers, and you must comment back, sparing no feelings. So how do you get readers? You must take that post and Facebook it, "Tweet" (Twitter) it, Digg it, send out a press release about it, advertise it if you have to but just get it out there any way you can. And when you’re in a hot discussion on Twitter, don’t sugar-coat it! Notice the back and forth tweets between Brian and Debbie mentioned in the above post. Wow! I would love to watch a televised debate between these two. I’ll bet even Dancing With The Stars would come in a dismal second in the ratings.

Now let’s look at Debbie’s blog, http://www.debbieschlussel.com. This one’s filled with some pretty powerful anti-Islamic stuff. Click here for an example. Debbie is definitely not going to win any popularity contests with the Muslim community. In fact, one could go so far as to say she’s taking some major backlash with what Brian calls her “Islamophobia.” Furthermore, Brian is taking some serious risks in offending the plethora of hate-mongering organizations out there who if given the opportunity, would commit mass genocide against all Muslims, African Americans, Jews, Hispanics, Asians…well, you get the idea.

While Brian and Debbie both have strongly conflicting views, they have one thing in common - they speak their minds. And neither gives a rat’s butt about what anyone else thinks That’s the modus operandi of a true Super Blogger. And that’s what makes today’s cyber-world go ‘round.

©2009 Angel Reyes
www.ReyesLaw.com

Oh How the Mighty Have Fallen

Angel Reyes — Sun, 30 Aug 2009 18:06:04 -0600

A recent Wall Street Journal article noted that Cerberus Capital Management, LP is literally facing a run on its funds. Clients withdrew more than $5.5B or 71% of the hedge fund's assets.

Stephen Feinberg named his fund Cerberus because it was the name of a mythical three-headed dog that guarded the gates of Hades. Touche. It looks like he'll be eaten by Cerberus in the end.

]]>Feinberg was an almost mythical figure, hence the name he chose for his fund. Indeed, his lifestyle was like Howard Hughes. Feinberg didn't lack the stones for making big bets with his clients' money.

Chrysler, GMAC, big big busts. Cerberus is next. According to the Wall Street Journal,

It was Mr. Feinberg's two boldest bets made at the height of the credit boom -- his acquisitions of Chrysler and GMAC -- that turned him and his firm into the center of attention on Wall Street. He and other investors contributed $14 billion to do the deals, and demand was so great that Cerberus charged his co-investors rich fees to invest alongside it.

The two investments were effectively wiped out when Chrysler declared bankruptcy and GMAC was bailed out with billions of dollars in government aid. As part of that deal, Cerberus was forced to give up control of the company.

Meanwhile, the main hedge fund run by the firm, called Cerberus Partners, lost 24.5% in 2008. It is up about 3% in 2009. Since December, Cerberus has faced a wave of withdrawal requests by investors spooked by the markets and Cerberus's own losses. Cerberus refused to return cash, saying that weak market conditions would mean low prices if it sold holdings.

This is really the time for house cleaning whether you're an institutional money manager or a small investor working with someone from AG Edwards.

Have a look at Cambria Investment Management, Inc. and Dranger Capital Management, LLC. Both are getting some terrific press and since this is a good time to do some housecleaning, you may as well have a look at these two companies.

Free-Trade Agreement With Panama Is Critical

Angel Reyes — Tue, 28 Apr 2009 12:54:42 -0600

Since 1900, the country of Panama has been a vital part of our country's free trade. We should not let a small band of self-interested activists derail the free trade agreement we need to strike with Panama.

I hope my former Mayor, Ron Kirk, can navigate the shoals and ensure that we don't lose the free trade agreement with Panama.

Panama to Signal Obama's Agenda
Wall Street Journal
APRIL 28, 2009
By GREG HITT

WASHINGTON -- President Barack Obama has signaled in recent days a more positive stance toward free trade than he did on the campaign trail, pleasing business groups but courting a backlash among trade-skeptical Democrats in Congress.

]]>An early test of just how much Mr. Obama will push trade in addition to the other issues on his agenda -- like health care, climate change and financial regulation -- will be whether he prods Congress soon to ratify a free-trade agreement with Panama negotiated under the Bush administration.

The White House's newly confirmed trade representative, Ron Kirk, indicated that was under consideration in a speech last week, saying "we believe there is strong bipartisan support for the pending free-trade agreement with Panama." Mr. Kirk also mentioned possibly moving forward with other stalled Bush-era pacts with Colombia and South Korea.

That came a few days after Obama aides suggested the president wouldn't seek to reopen the North American Free Trade Agreement to address concerns about labor and environmental protections. Mr. Obama had, as a candidate, pledged to renegotiate the deal. And it followed a decision by the Obama administration not to label China a currency manipulator, though Mr. Obama himself had done just that during the campaign. Critics of China say Beijing keeps the value of the yuan artificially low to give their exporters a leg up in the world economy.

After Mr. Obama and congressional Democrats talked tough on trade during the 2008 campaign, business leaders worried about new protectionism out of Washington. Now, some say they are more encouraged.

"If the president could just move the Panama agreement, it would send a signal to the world that we're open for business," Jim Owens, chairman and chief executive of Caterpillar Inc., said in remarks at the Council on Foreign Relations the same day as Mr. Kirk's speech.

But trade skepticism and populist economic sentiments still run high on Capitol Hill. Those sentiments derailed the trade agenda in the final years of the Bush presidency and helped fuel Democratic gains at the polls in the last two elections.

Rep. Mike Michaud (D., Maine) issued a statement after Mr. Kirk's speech denouncing the talk of acting on Panama as "absolutely outrageous and a serious mistake." Mr. Michaud, a strong critic of U.S. trade policy, suggested Mr. Obama risks alienating voters who are worried about trade and globalization, and dividing Democrats on Capitol Hill. "You're just courting trouble," he said in an interview.

That came as other leaders in Congress have stepped up their campaign for Mr. Obama to stick more closely to his trade promises. "I am disappointed that the Treasury Department did not cite China as a currency manipulator," Ohio Democratic Sen. Sherrod Brown told a Washington audience last week. He called on Mr. Obama to convene a blue-ribbon commission to "help create a new path on trade." He added, "The basic premise of redirecting U.S. trade policy is that we must see evidence that our trade model is working before we pass new trade agreements -- whether with Panama, Colombia or South Korea," he said.

Already this year, Mr. Obama has had some small tussles with Congress on trade. Lawmakers tucked into the stimulus legislation a "Buy American" provision requiring preferences for domestic suppliers on government contracts. That has stirred tensions with trade partners, prompting the administration to vow to water down the rules.

Congress attached to a separate spending bill a provision that killed a program that allowed Mexican trucks to transport cargo into the U.S. Mexico responded with tariffs on a list of American exports. The White House has said it was working to resolve the dispute.

The next big test for trade is Panama. Mr. Kirk said last week that the deal wasn't ready yet for a congressional vote, saying, "I'm working to resolve some labor and other issues before we ask Congress to consider it."

Deborah Mesloh, spokeswoman for Mr. Kirk, said the administration is ready to work with Congress to address concerns on the trade agenda.

What You Can Do To Make Money In Any Market

Angel Reyes — Wed, 15 Apr 2009 13:20:00 -0600

The markets and economy have whipsawed just about everyone this year. I've written plenty about unemployment, especially Hispanic unemployment. Not much positive news to report today, nor since I reported back in 2007 that no one would miss the various subprime lenders, all of whom have gone kaput. Funny thing, as predicted, no one remembers any of these companies’ names, but everyone remembers the pain the subprime lenders caused that rippled through the greater economy. Say goodbye to Lehman Brothers. Taxpayers now own 80% of AIG. The bleeding hasn't stopped. Where do you turn?

]]>I have some good news to finally report. The managers of Cambria Investment Management, Mebane Faber and Eric Richardson, published a well received book, The Ivy Portfolio, recently reviewed in Businessweek, April 21, 2008 p. 82. The review of the book explores how Cambria Investment Management beat just about every money manager in the country, including the endowment managers at Harvard and Yale. How did they do it? Well, pick up The Ivy Portfolio here and read for yourself. I've been working with Eric Richardson for over a decade. He's a genius and the portfolio manager, Mebane Faber is a quant genius' genius. So, if you're sick of your big shot broker telling you how to lose 30-60% a year, perhaps it's time to switch to Cambria Investment Management. Full disclosure, I am an investor with Cambria Investment Management.

The full text of the article in Businessweek is below.

New Books Pitch Investment Strategies
Some books offer repackaged conventional wisdom-which has seen better days.
But one proposed strategy would have outperformed most others
BusinessWeek
Portfolio Strategy April 9, 2009, 5:00PM EST By Aaron Pressman

The market's crash during the past year has discredited many of the informal rules that investors rely on. Safe havens such as health-care and utility stocks dropped almost as much as the rest of the market, and many supposedly low-risk bond funds cratered because of the credit crunch. With conventional wisdom so upended, it's worth perusing the latest crop of investment strategy books to sort out which ones offer fresh guidance.

Some of the most recent continue to present standard stock-picking advice. Money manager James Altucher's The Forever Portfolio and hedge fund manager Howard Lindzon's The Wallstrip Edge: Using Trends to Make Money both include solid suggestions about how to research individual stocks and long-term demographic trends, as well as details on deciding when to buy or sell. But both also feel slightly dated. Altucher's chapter on the strength of ultra-luxury brands in a recession, for example, hasn't proved true in this market downturn.

Money manager Alexander Green offers a more systematic approach in The Gone Fishin' Portfolio. Green gets off to a good start, accurately noting the long-term benefits of diversification and of minimizing fees by using index-based funds. But his suggestion that investors use a fixed allocation to 10 different exchange-traded funds (including U.S. stocks, high-yield bonds, and real estate investment trusts) didn't look so great once markets across the world started to fall in unison last year.

The Green portfolio would have lost 28% in 2008, better than the Standard & Poor's 500-stock index's 37% loss but considerably worse than a portfolio of 60% stocks and 40% bonds. Using that mix with two total market ETFs Green recommends would have brought a 19% loss. And while gold was a bright spot last year, Green included an ETF of gold-mining stocks, which performed dismally, instead of an ETF investing directly in the precious metal. It's fair to argue that Green's portfolio should be judged over longer periods, but making up losses on the scale of the current bear market could take a decade or more.

The most useful recent book could be The Ivy Portfolio: How to Invest Like the Top Endowments and Avoid Bear Markets, by money managers Mebane Faber and Eric Richardson, who work at Cambria Investment Management. They analyze how the endowments of Harvard and Yale posted such world-beating performance. Then they offer a simplified model that regular people can adopt.

Their system starts with an equal mix of funds investing in U.S. and foreign stocks, bonds, real estate, and commodities. Although the universities include hedge funds, leveraged buyout funds, and venture capital plays, the authors excluded them because they aren't generally available to individual investors. And instead of staying fully invested at all times, the authors offer a useful warning system: If at the end of a month any fund is trading for less than its average price over the previous 10 months, move into cash until the price exceeds the 10-month average again. That average price could be higher or lower than when you bought, but it's a good measure that an upward trend has run out of steam.

The great irony of the book is that Yale and Harvard are suddenly suffering from their worst performance on record due in part to losses on hedge funds and LBO funds. Faber and Richardson's system, thanks to the timing element that put 80% of assets in cash last year, actually did far better, gaining 1.3%. Maybe the investing gurus at Yale and Harvard should take heed.

Texas Tech University Articles on My New Book

Angel Reyes — Tue, 10 Mar 2009 18:01:10 -0600

Please read the articles below, featured on March 10, 2009 in Texas Tech Today and Texas Tech University News:

Texas Tech Today
Hispanic Immigration: Facts versus Fallacies, Clarifying America's Opportunity
Three Rawls College of Business professionals address the booming Hispanic population in the U.S. and its economic, political and social impacts.
March 10, 2009
Written by Leslie Cranford

As the Hispanic population in the United States booms, fallacies surrounding the economic and social impact of Hispanics on America thrive. Two Texas Tech University professors and an alumnus argue that there are opportunities within the challenges that many people do not see.

In their new book, “Hispanic Heresy: What is the Impact of America’s Largest Population of Immigrants?” the three authors work to dispel many of the misunderstandings about how Hispanics in America impact the country’s socio-economics.

The book is by Angel L. Reyes III, a 2008 graduate of the Rawls College of Business Executive MBA program and Dallas-area attorney; Bradley Ewing, the Jerry S. Rawls Professor in Operations Management; and James Wetherbe, Rawls College of Business Stevenson Chair in Information Technology.

]]>Perceptions and Misconceptions
The problems, which are well-publicized, pertain to illegal immigration which can burden the educational, social welfare and medical care systems. Income tax may not be collected and labor abuse may occur.

The opportunity, said Reyes, pertains to the historical value of immigrants and their willingness to take on the entry-level jobs and work their way up to achieve the American dream.

“One of the biggest misconceptions that we try to address in the book is that Hispanic immigration is bad for America,” Reyes said. “On the contrary, Hispanics now represent 42 million people in the United States. That population group represents almost a trillion dollars in economic activity. If demographic models hold, by the year 2050 almost one in four Americans will be of Hispanic origin. What a tremendous opportunity that is the workforce and the face of the future of America.”

The positive growth rates in the Hispanic population are not just a result of immigration, but increasingly the result of a higher birthrate among the Hispanic population – citizen and non-citizen, state the authors.

A Question of Economics
“We’ve used a descriptive approach to looking at Hispanic immigration,” Reyes said, “and in spite of the vitriol that you hear on cable news and talk radio, we came to the conclusion that Hispanic immigration is actually a very positive thing as it affects the American economy and the United States in general.”

Ewing echoed Reyes’ optimistic comments about Hispanics’ future economic impact.

“When a Hispanic consumer spends money, they’re not just limiting money spent to Hispanic owned businesses. That’s part of it, but there are also jobs being created and sustained for all different types of individuals. And I think if we look at the trends in education, in earnings of Hispanics, and in the demographics – age group changes going on – we’re going to see those as important factors of this economy.”

Wetherbe explained that whether immigration is legal or illegal, it’s all about opportunity.

“With illegal immigration the challenge really is about a high disparity between the opportunity of where you’re at and where you’d like to be,” Wetherbe said. “A common find for example, is seven to one; that if it’s seven times better one place than another, people will do whatever it takes, and that’s true of all countries. If you’d gone to the Berlin Wall when it was a barrier between East and West Germany, people would smuggle themselves inside of car engine compartments – they’d risk being shot crossing a border – anything they could do to try to get that better opportunity. The same is true more recently in the United States; people are willing to risk their lives traveling in very perilous circumstances just to get to America.”

Language Double-speak
Another volatile issue Reyes addresses is the question of immigrants learning English. One camp says that immigrants should be given a bilingual education and another camp that’s equally strong says it should be full immersion and that they should learn English.

“Our book comes out in favor of everybody learning English for a lot of reasons,” he said. “But the most important reason is that to really succeed in America, you must learn English. While a first generation immigrant may never master English, a second generation person, after having gone through our public schools or even our private institutions, will know a fair amount of English. By the third generation, you can almost be assured that the Spanish will be what is lost, not the English. We think it is important because, to succeed in this country in a business sense, in a career sense, you must master English. The global commerce language is English, so we think it’s very important for every immigrant to make every effort to learn English.”

Reyes, Ewing and Wetherbe embrace different political points of view from conservative to liberal. All three authors contributed significant content. Reyes provided most of the subject matter and topics to be covered along with content, stories and perspectives from his personal as well as professional experiences. Ewing did the economic and statistical research and analysis and explained the results and how it impacts the Hispanic community in the United States. Wetherbe provided content including stories, examples, metaphors and analogies to help convey the message of the book. He also managed the overall tone, expression, structure and organization of the book.

---------------------------------------------------------------------------------------------------------------

Texas Tech News
Experts: Hispanic Boom is Economic Boon
Texas Tech University authors make argument for Hispanic-led economic boom.
March 10, 2009
Written by Leslie Cranford

The booming Hispanic population in the United States presents well-publicized challenges, but three Texas Tech University colleagues believe that the Hispanic immigration phenomenon presents opportunities, not roadblocks.

A new book “Hispanic Heresy: What is the Impact of America’s Largest Population of Immigrants?” asserts that opportunities exist relevant to the historical value of immigrants and their willingness to take on the entry level jobs and work their way up to achieve the American dream.

Co-authors are Angel L. Reyes III, a 2008 graduate of the Texas Tech Rawls College of Business Executive MBA program and Dallas-area attorney; Bradley Ewing, the Jerry S. Rawls Professor in Operations Management; and James Wetherbe, Rawls College of Business Stevenson Chair in Information Technology. The trio works to dispel many of the misunderstandings about how Hispanics in America impact the country’s socio-economics.

The three authors, who embrace different political points of view, are available for discussion and comment.

The book is available online at www.meadpublishing.biz.

Commercial Market Meltdown©

Angel Reyes — Wed, 05 Nov 2008 10:48:01 -0600

Once upon a time, if you had a commercial loan with a bank and you didn't like the interest rate or other facet of your loan, all you had to do was move to another bank. But as I said, that was once upon a time, although not so long ago.

Remember the financial woes of the 80s? Well, it's déjà vu in spades. The commercial foreclosure market is running a race with the residential one, and it's anyone's bet which one's going to win.

Many clients of law firms have been severely affected by our ever-worsening economy and depleted capital markets. The good news is that these firms drawn on the lessons learned from the 80s, and are there to help clients avoid the foreclosure process.

]]>Law firms help lending institution clients by aggressively working out arrangements with borrowers who are still credit-worthy and have the ability to pay. Two primary ways of doing this are 1) shorten the maturity dates on notes or 2) have the borrower pay down the line of credit. The goal is to do everything possible to ensure that these loans remain intact, and avoid the foreclosure process.

Clients who are landowners and developers utilize the help of attorneys to bring a win-win proposition to their lenders. Several clients are financially sound, influential and prominent people who have become involved in numerous ventures at once rather than just one or two. In previous times, having multiple business deals wasn't a problem, but in today's financial world, it can be devastating. With fifteen to twenty ventures going at one time, these clients are now unable to meet their financial obligations, no matter how successful they've been in the past. We're arguably in the biggest financial crisis since the Great Depression, and it takes attorneys with experience, know-how and business savvy to help people through these tough times.

When a real estate property goes into default in today's economy, the lender often wants to call the entire loan, not just the payment due. The philosophy now is that every borrower is a risk, regardless of their past good credit and payment history. That's where a law firm comes in. Its attorneys will attempt every possible strategy to work out a payment plan. If they can't come to terms with the lender, they'll look for flaws in the loan documents or foreclosure process prior to its implementation. Often, they'll attempta temporary restraining order (TRO) against the lending institution prior to the foreclosure. If all else fails, a Chapter 11 bankruptcy may be necessary to prevent the foreclosure.

For the past three years, nonsensical real estate deals have been made in both the commercial and residential real estate markets. These deals were doomed from the start, and now many clients have no other alternative but to default on their loans.

Write to Angel Reyes at angel@reyeslaw.com

AIG's Comeuppance

Angel Reyes — Mon, 22 Sep 2008 10:52:47 -0600

For 15 years my firm and the lawyers who work here have represented executives, business owners, and individuals seeking money damages for the wrongful conduct of others. Many times the claims we make are covered by insurance bought by insureds specifically to cover the event that underlies our lawsuit.

Often the work we do involves suing insured entities or in other instances, suing the insurance company directly.

Why have we built a specialty suing insurance companies directly on behalf of executives and business owners? Aren't those folks usually complaining that trial lawyers are driving up their insurance costs?

]]>The answer is nuanced and was stated perfectly by Gretchen Morgenson, columnist for the New York Times in today's column "Your Money at Work, Fixing Others' Mistakes". She described the rescue of American International Group (AIG), once the world's largest insurance company. In her words, “It was pretty breathtaking. Since when do insurance companies, whose business models seem to consist of taking in premiums and stonewalling claims, deserve rescues from beleaguered taxpayers?"

Indeed our law firm's experience fits Morgenson's description to a T. AIG, and most other large insurers, take policyholder premiums and then when the policyholder makes a claim under the policy, the insurance company stonewalls and often refuses to pay the claim at all. That's when it pays to know lawyers such as the ones in my firm. We will litigate to get your insurance claim paid.

Don't buy the tort reformers argument that lawyers are driving up insurance premiums. When AIG writes $441 billion in credit default swaps, most of which were going sideways until us taxpayers bailed out AIG, only a fool would believe that insurance premiums are being driven by legitimate claims that AIG mostly stonewalls anyway.

Don't keep falling for the tort reformers’ creed. All they’re after is your premium money and to hell with your claim. What did Greenberg make his last year at the helm of AIG-a couple hundred million dollars in compensation? He keeps the money and us taxpayers are now bailing out AIG. Now let me hear the tort reformers continue to cry for the insurance industry; there is no end to their greed and hypocrisy.

See the full article below:

Your Money at Work, Fixing Others’ Mistakes
By GRETCHEN MORGENSON
The New York Times
Published: September 20, 2008

It looks as if we may get through this weekend without another scramble to save a troubled financial firm with a trillion-dollar balance sheet.

But that doesn’t mean taxpayers are out of danger. No, sir. No, ma’am. Because lawmakers are at work on a bailout fund that would buy the kind of distressed assets (defaulted mortgages, for example) that have ignited this firestorm.

Treasury Secretary Henry M. Paulson Jr. has called the fund the “troubled asset relief program.” I’ll just call it TARP for short (you know, the kind of thing they spread over muddy fields so you don’t soil your Guccis).

And depending on how TARP is operated, and how the assets are valued before taxpayers are forced to buy them, it could bloat our final bill for this mess while benefiting the very institutions that got us into it.

Yes, we need a smart plan and a concerted effort to get the frozen credit markets up and running. But we also have to be certain that the types of conflicts of interest that riddle Wall Street aren’t visited upon TARP.

Consider: A bank wants to sell the TARPistas (also known as TAXPAYERS) a pile of stinky mortgage securities that it currently values at 60 cents on the dollar. Let’s assume that the most recent actual trade between market participants for similar assets was struck at 30 cents on the dollar.

So what’s a fair price that we TARPistas should pay for the assets?

If we bought at 60 cents, a price that the bank would argue is appropriate, we would most likely face a loss. The bank, however, would be much better off than if it had to dump at 30 cents.

Conversely, if the assets were sold at 30 cents, taxpayers could wind up making a profit on the purchase if the assets performed better than expected over time. But the bank would have to write down the value of the assets as a result of the sale, possibly threatening its financial standing yet again.

Do you think, perchance, that financial services lobbyists might be working their Hill contacts right this very minute to ensure that the TARP valuations are rigged in their favor?
You know the answer to that.

And you also know that we should steel ourselves for heavy losses as the TARP gets pulled over our eyes. Never mind that it was the banks, with their reckless lending and monumental leverage, that drove us into this ditch.

Such is our lot today: They break it. We own it.

Taxpayers deserve better than this, of course. But we have no lobbyists, so we get skinned.

IF federal regulators and political leaders want to earn back some trust, they could do two things. First, they could provide us with some transparency about whom precisely we are backing in the recent bailouts.

Take, for example, the rescue on Tuesday of the American International Group, once the world’s largest insurance company. It was pretty breathtaking. Since when do insurance companies, whose business models seem to consist of taking in premiums and stonewalling claims, deserve rescues from beleaguered taxpayers?

Answer: Ever since the world became so intertwined that the failure of one company can topple a host of others. And ever since credit default swaps, those unregulated derivative contracts that allow investors to bet on a debt issuer’s financial prospects, loomed so big on balance sheets that they now drive every bailout decision.

The deal to save A.I.G. involves a two-year, $85 billion loan from taxpayers. In exchange, the new owners — us — get 80 percent of the company. If enough of A.I.G.’s assets are sold for good prices, we may get our money back.

Credit default swaps, which operate like insurance policies against the possibility that an issuer of debt will not pay on its obligations, were the single biggest motivator behind the A.I.G. deal.

A.I.G. had written $441 billion in credit insurance on mortgage-related securities whose values have declined; if A.I.G. were to fail, all the institutions that bought the insurance would have been subject to enormous losses. The ripple effect could have turned into a tsunami.

So, the $85 billion loan to A.I.G. was really a bailout of the company’s counterparties or trading partners.

Now, inquiring minds want to know, whom did we rescue? Which large, wealthy financial institutions — counterparties to A.I.G.’s derivatives contracts — benefited from the taxpayers’ $85 billion loan? Were their representatives involved in the talks that resulted in the last-minute loan?

And did Lehman Brothers not get bailed out because those favored institutions were not on the hook if it failed?

We’ll probably never know the answers to these troubling questions. But by keeping taxpayers in the dark, regulators continue to earn our mistrust. As long as we are not told whom we have bailed out, we will be justified in suspecting that a favored few are making gains on our dimes.

A.I.G.’s financial statements provided a clue to the identities of some of its credit default swap counterparties. The company said that almost three-quarters of the $441 billion it had written on soured mortgage securities was bought by European banks. The banks bought the insurance to reduce the amounts of capital they were required by regulators to set aside to cover future losses.

Enjoy the absurdity: Billions in unregulated derivatives that were about to take down the insurance company that sold them were bought by banks to get around their regulatory capital requirements intended to rein in risk.

Got that?

Which brings us to Item 2 for policy makers. Stop pretending that the $62 trillion market for credit default swaps does not need regulatory oversight. Warren E. Buffett was not engaging in hyperbole when he called these things financial weapons of mass destruction.

“The last eight years have been about permitting derivatives to explode, knowing they were unregulated,” said Eric R. Dinallo, New York’s superintendent of insurance. “It’s about what the government chose not to regulate, measured in dollars. And that is what shook the world.”

And it will continue.

Losses Due To ARS Market Disintegration

Angel Reyes — Tue, 05 Aug 2008 09:36:45 -0600

Over the past few months, the Auction Rate Securities (ARS) markets have suffered a $350 billion market disintegration. Many companies have been forced to write-down their losses due to investments in ARS. The February 2008 collapse of the ARS market affected companies of all sizes and levels of ARS investment. It also affected many individuals who thought that an investment in ARS was safe and secure. Individual investors saw their assets frozen, and most are unable to access their accounts. Companies and individuals lost hundreds of millions of dollars in ARS, even though brokers marketed them as safe, secure, liquid investments.

In fact, this market disintegration has widened to include the State of New York, which, as reported by the Wall Street Journal, filed civil fraud charges on July 24, 2008 against UBS AG, accusing the firm of a "multibillion-dollar consumer and securities fraud," and demanding that the firm pay back its profits from the business, make investors whole and pay damages.
My firm, Heygood, Orr, Reyes, Pearson & Bartolomei has helped many investors recover their losses from ARS investments. If you’re one of those investors, give me a call at 1.877.308.7900 or email angel@reyeslaw.com for a confidential assessment of your claim.

For more information on ARS losses, read the following Wall Street Journal articles below:
]]>
Citigroup May Face Auction-Rate Suit
Cuomo Threatens Charges of Fraud, Destroying Evidence
By AMIR EFRATI
August 2, 2008; Page B7

New York state's attorney general, Andrew Cuomo, threatened on Friday to sue Citigroup Inc. for alleged fraud in the marketing and sales of auction-rate securities and for destroying evidence after being subpoenaed by his office.

Charges could be filed as early as the next couple weeks if the sides don't reach a settlement, said people familiar with the matter.

Citigroup said it is cooperating with Mr. Cuomo's investigation and "acted in good faith and in the best interests of our clients both before and since auctions began to fail, and there is simply no basis for claims to the contrary." A Cuomo spokesman declined to comment.

The firm also disclosed Friday in a regulatory filing that it has received subpoenas or requests for information from the Securities and Exchange Commission, among others, in connection with its handling of auction-rate securities.

In a letter written to Michael Sharp, general counsel of Citigroup's wealth-management arm, an official in Mr. Cuomo's office said its five-month probe showed the bank "committed fraud by making material misrepresentations and omissions" in its underwriting, distribution and sale of the securities.

The letter, written by David Markowitz, the head of the investor-protection bureau in Mr. Cuomo's office, accused the bank of wrongly telling customers the securities were safe, liquid and cash-equivalent. It added that the bank failed to tell investors that, from last August until earlier this year, the market was kept afloat only because the bank placed bids in auctions for the securities.

The letter demands that Citigroup buy back investors' securities at par and reimburse some investors for damages they have incurred, and wants the firm to pay an unspecified penalty.

The letter also accused the firm of violating state law by destroying "recordings of telephone conversations concerning the marketing, sale, distribution or auction" of the securities -- recordings requested by Mr. Cuomo's office in an April subpoena.

"There is simply no basis for this claim," Citigroup said. The firm regularly tapes over old recordings, and it inadvertently taped over one set of recordings that were relevant to the probe, the firm said. "As soon as we learned of the oversight, we immediately suspended all recycling of tapes and preserved all existing tapes" and notified regulators, the firm said.

If charges are brought, Citigroup would become the third big financial firm to face civil-fraud charges by regulators since the auction-rate imbroglio.

Mr. Cuomo's office has already filed a lawsuit against UBS AG, accusing the Swiss bank's executives of selling their personal holdings in auction-rate securities in the months leading up to the market's collapse, based on knowledge of problems in the market.

In June, Massachusetts securities regulators sued UBS for allegedly misleading investors about the market's risks and increasing its efforts to sell the securities after realizing the market was in trouble. UBS is contesting charges by both states.

Massachusetts securities regulators have sued Merrill Lynch & Co., accusing it of co-opting its own analysts to help the investment bank dump collapsing auction-rate securities on investors. Merrill is fighting the charges.

Auction-rate securities, typically issued by municipalities, student-loan companies and charities, are long-term securities with short-term features. The interest rates reset at weekly or monthly auctions run by Wall Street firms.

S&P Email: 'We Should Not Be Rating It'
By AARON LUCCHETTI
August 2, 2008; Page B1

Problems keeping up with the surging growth of mortgage-related debt products were particularly acute at Standard & Poor's Ratings Services, according to a draft version of a Securities and Exchange Commission report on bond-rating firms.

The agency's report, which included unflattering emails, was released July 8 but didn't identify the firms or individuals who wrote the emails. The SEC said that was general practice for an industry review.

Some of the most strongly worded emails from analysts questioning their own ratings came from S&P, according to a draft version of the 38-page report, which includes the firms and was reviewed by The Wall Street Journal. The unit of McGraw-Hill Cos. is the largest bond-rating firm by revenue.

In one email, an S&P analytical staffer emailed another that a mortgage or structured-finance deal was "ridiculous" and that "we should not be rating it." The other S&P staffer replied that "we rate every deal," adding that "it could be structured by cows and we would rate it."

Meanwhile, an analytical manager in the collateralized debt obligations group at S&P told a senior analytical manager in a separate email that "rating agencies continue to create" an "even bigger monster -- the CDO market. Let's hope we are all wealthy and retired by the time this house of cards falters.;O)"

The draft report could trigger more scrutiny of how each bond-rating firm did business during the credit market's boom and bust, including how they dealt with conflicts of interest and other issues affecting the accuracy of ratings.

A McGraw-Hill spokesman said the firm wouldn't comment on specific emails.

The unredacted version of the SEC's report also shows that S&P and Moody's Corp., the industry's two biggest members, didn't add staff dealing with CDOs as fast as that business was growing. At S&P, revenue from rating the mortgage-laden bond portfolios grew more than 800% from 2002 to 2006, but related staffing doubled. At Moody's, the comparison between revenue and staff was similar, but its growth rate in CDOs was somewhat lower than at S&P.

Staffing levels have long been a hot-button issue at rating firms. Frank Raiter, a former S&P managing director who oversaw residential-mortgage ratings, said the number of deals his analysts rated rose to about nine per month before he left in 2005 -- about double the workload in 2000.

"We are short on resources," one S&P analytical manger said in an email to a senior manager in December 2004, according to the SEC report. Analysts working 60-plus hours a week were resigning and "experiencing health issues," the email added. "We are burning them out."

McGraw-Hill said S&P "has consistently invested in resources and increased its professional staff across its business lines." The firm added that the SEC found fewer staffing problems in residential mortgages and that S&P overall has more than doubled its staff since 2002. Rating firms have also said that as time passed, new deals could be rated faster because they were growing similar.

But satisfying Wall Street issuers also crept into the process. "We are meeting with your group this week to discuss adjusting criteria for rating CDO's of real-estate assets...because of the ongoing threat of losing deals," S&P commercial mortgage analyst Gale Scott wrote to colleagues in August 2004, according to the draft report and a person familiar with the situation.

Richard Gugliada, a former S&P official who replied to Ms. Scott's email, said he recalls that commercial-mortgage rating criteria were changed slightly after several meetings on the subject. Ms. Scott, who still works at S&P, couldn't be reached for comment.

In early 2007, an S&P official involved in real-estate deals stated that "our staffing issues, of course, make it difficult to deliver the value that justifies our fees." In another email, an S&P official wrote: "Just too much work, not enough people, pressure from the company, quite a bit of turnover and no coordination of the non-deal stuff they want us and our staff to do."

Auction-Rate Crackdown Widens
UBS Faces New Charges in New York, as Scrutiny of Wall Street's Role Intensifies
By LIZ RAPPAPORT
July 25, 2008; Page A1

The state of New York on Thursday joined a widening array of prosecutors and customers accusing Wall Street firms of wrongdoing in efforts to hold together the $330 billion auction-rate securities market before it collapsed in February.

State Attorney General Andrew Cuomo filed civil fraud charges against UBS AG, accusing the firm of a "multibillion-dollar consumer and securities fraud," and demanding that the firm pay back its profits from the business, make investors whole and pay damages.

A spokeswoman for UBS said, "We will vigorously defend ourselves against this complaint."

The New York attorney's case echoes a similar case brought against UBS by Massachusetts officials and many private cases and arbitration claims filed against UBS and other prominent firms in recent months.

The firms are accused of pushing risky securities on retail and corporate customers with misleading sales tactics, even as the market for those securities was falling apart. When the collapse came, many customers faced losses or were stuck with securities they couldn't sell.

Wall Street firms themselves have suffered immense losses and faced litigation resulting from their activities in other kinds of troubled financial instruments -- most notably mortgage-backed securities. Their auction-rate problem could prove a smaller financial scar than the hundreds of billions lost in mortgage-backed securities, but a big loss to Wall Street's reputation.

The victims in the auction-rate cases range from individual investors to big corporations. Some 250 public companies held these instruments, as did tens of thousands of individuals. The companies -- ranging from 3M Co. to Texas Instruments Inc. -- have on average written down the value of these holdings by 12% in the past few months, according to Pluris Valuation Advisors LLC, a company that helps corporations value illiquid securities. Applied across the whole $330 billion market -- which since February has gotten substantially smaller -- that would amount to roughly $40 billion of losses.

Auction-rate securities -- issued by municipalities, student-loan companies, charitable organizations and others -- are long-term securities that Wall Street engineered to have short-term features. Their interest rates reset at weekly or monthly auctions run by Wall Street firms. The firms promised individual investors and corporate clients that the frequent auctions made these securities as safe and liquid as cash because they would always be easy to sell quickly.

A Common Allegation

At the root of these cases is a common allegation: As problems mounted in these auctions and their own inventories of these securities became bloated, Wall Street firms worked aggressively to push the instruments out of their doors and into the hands of clients, playing down the severity of the problems rippling through the market.

The action, Mr. Cuomo and others charge, helped to contain their own losses but left their customers with beaten down, illiquid investments.

The New York complaint also alleges that several high-ranking UBS executives, whom the New York attorney didn't name, sold roughly $21 million of their own auction-rate securities holdings amid the turmoil. Some 50,000 UBS customers were left holding $37 billion worth of the struggling investments, the complaint says.

Karina Byrne, a UBS spokeswoman, said, "UBS does not believe that there was illegal conduct by any employee." After an internal investigation into personal sales of auction-rate securities, "we have found cases of poor judgment by certain individuals and are evaluating appropriate disciplinary measures for these individuals," she said.

"It is frustrating that the New York Attorney General has filed this complaint while we have been fully engaged in good-faith negotiations with his office to bring liquidity to our clients holding auction-rate securities," she added.

UBS is at the center of many of these allegations, but it isn't alone. Investigators from 10 states showed up at the offices of Wachovia Corp.'s St. Louis brokerage offices last week to get documents and conduct interviews in a dramatic escalation of their probe into its auction-rate activities. Wachovia said it, like others, is responding to inquiries from regulators.

State attorneys are also probing the activities of Merrill Lynch & Co., Citigroup Inc. and others. Merrill Lynch and Citigroup declined to comment.

The securities are backed by pools of other financial instruments, such as student loans, ultra-safe municipal bonds or complex subprime-mortgage debt. Even the safe municipal bonds were drawn into the unfolding mortgage crisis because they were backed by struggling bond insurers with exposure to mortgage debt.

Stepping In

In normal times, when weekly auctions of auction-rate securities failed to generate sufficient demand, Wall Street firms stepped in to support the market, buying the instruments themselves. But as they became strained by other problems, Wall Street firms stopped supporting the market with their own bids. By February, nearly every auction wasn't drawing enough buyers and the securities suddenly became illiquid, impossible for investors to cash in.

In February, the market for auction-rate securities collapsed when the big dealers in the market -- including UBS, Citigroup, Merrill and others -- stopped supporting struggling auctions, leaving investors unable to sell. Many companies have had to mark down their value, individuals have been stuck unable to access cash, and issuers of the instruments have had to pay higher interest rates or find a new way to raise money.

Before it fell apart, Wall Street firms raised some brokers' commissions to get the securities out the door. Merrill Lynch published reassuring research just days before it pulled out of the market. At UBS, executives mobilized its financial advisers to sell the securities to institutional and retail investors, many of whom have since filed complaints alleging UBS and others offered sugar-coated assurances in the months leading up to the February collapse.

One example unearthed in the Massachusetts investigations: Last November, Edward Hynes, an institutional sales manager at UBS, was preparing for a conference call with salespeople who worked directly with investors. In an email to three colleagues who would be leading the call, he laid out a strategy for the message that salespeople should take to UBS clients, according to documents filed by the state of Massachusetts against UBS.

"We need them to walk out and believe that this is a strong credit w [sic] strong UBS commitment to support the liquidity," Mr. Hynes wrote in an email to several colleagues about auction-rate securities backed by student loans, according to the Massachusetts case. At the time, the market was still a few months away from breaking, but cracks were already showing up. Mr. Hynes isn't named in the New York complaint.

People familiar with the email say the call would have been with institutional salespeople, not retail investment advisers.

"We are not going to address specific emails taken out of context," said Ms. Byrne in a statement. "UBS has acted in clients' best interests in this matter."

Another example involves a lawsuit filed early in June by Latham, N.Y., energy company Plug Power Inc. The company claims UBS assured Plug Power's chief financial officer, Gerry Anderson, in a conversation in October that auction-rate securities backed by student loans were safe and liquid, despite spikes in their interest rates that suggested otherwise.

Plug Power Inc. had bought $62.9 million in auction-rate securities backed by pools of student loans starting in 2005, comprising 44% of its total investment portfolio, according to the complaint. The claim alleges UBS put Plug Power into more student-loan auction-rate securities throughout the fall, after the CFO expressed concern.

UBS declined to comment on the lawsuit.

Incentive to Sell

Wall Street firms started raising commissions paid to some brokers at outside dealers who sold the securities to clients, an action that might serve as an enticement to them to sell more.

On Nov. 2, 2007, for example, Credit Suisse's short-term trading desk sent out an email informing its salespeople that Citigroup was increasing its commissions to outside dealers from 0.15 of a percent of the security sold to 0.20 of a percent on certain of its auction-rate securities, according to a person familiar with the email. By the start of January, their commissions on all types of Citigroup's auction-rate securities rose to 0.15 of a percent, instead of 0.1, says the person.

Citigroup and Credit Suisse both declined to comment.

Wall Street analysts also put out reassuring research just days before the auction-rate market hit a breaking point. For example, investigators are looking at one Merrill Lynch note that went out days before the market collapsed, according to people familiar with several investigations.

The note refers to problems in a $60 billion slice of the auction-rate securities market that was issued by closed-end mutual funds, called auction-rate preferred securities. These auctions were faltering by the end of 2007 as well.

"Auction yields still attractive despite spread compression," reads one bullet point of the report, published by analyst Kevin J. Conery on Feb. 8. It touted the bonds, saying they yielded at least 0.45 percentage points more than other types of bonds. "We continue to be impressed by the auction market's resiliency in the face of challenging times," the report said.

The inside of the report notes "noise around failed auctions," but goes on to highlight ways investors can invest in the market most safely, and states that securities issued by closed-end mutual funds are "still" viewed by the firm as "the conservative's conservative investment."

By Feb. 13, Merrill and UBS had stopped supporting the market.

A call to Mr. Conery was directed to Merrill's press office. "The research report was fair and balanced," says Mark Herr, a Merrill Lynch spokesman, in a statement. "Our analyst struck the right balance between sounding cautionary notes and concluding that there were insufficient alarms to herald the imminent and unprecedented collapse of the ARS market."

VIDEO: Angel Reyes on Legal Marketing

Angel Reyes — Mon, 28 Apr 2008 22:59:09 -0600

Nationally renowned trial lawyer Angel Reyes joins LBN's Rick Kuykendall to discuss an items of interest to trial lawyers, and that is the plan and approach to developing a mass tort practice out of their offices in Dallas, TX. This was part of a CLE sponsored by LBN and presented by the Wyoming Trial Lawyers Association and the full video CLE with credit hours is available by contacting WTLA in Cheyenne, WY. WATCH VIDEO...

Insurance Company Tactics Now Off the Scale

Angel Reyes — Fri, 07 Mar 2008 08:42:14 -0600

Now big insurance companies are using something called the Fake Bad Scale to expose “malingerers” who supposedly fake injury to obtain money. The test is so flawed that just about anyone with a legitimate injury can score as a malingerer. Dr. Lees-Haley, the psychologist who created the test, derives 95% of his income on behalf of the defense – the insurance companies. Now tell me this test is non-biased! Insurance companies stop at nothing when it comes to finding ways to not pay claims. One of their favorite ways of denying payment on a claim is to suggest that the whole thing is made up.]]>
Let’s hope some peers review this body of work, after all, from the article below it appears that the study suffers from numerous methodological problems, not the least of which is whether or not a large enough statistical sample was used. I’m curious to know what the t-tests showed. Fortunately, the admission of expert testimony by Dr. Lees-Haley, at least in most states, lies with the discretion of the trial Court. I bet the great Judges in Dallas County would disallow Dr. Lees-Haley’s testimony based upon this flawed study.

See the Wall Street Journal article about this subject in its entirety below:

Malingerer Test Roils Personal-Injury Law
'Fake Bad Scale' Bars Real Victims, Its Critics Contend
By DAVID ARMSTRONG
March 5, 2008
The Wall Street Journal

A test designed to expose fakers is roiling the field of personal-injury law, distressing plaintiffs and strengthening the hand of employers and insurers.

Proponents hail the true-or-false test as a valid way to identify people feigning pain, psychological symptoms or other ills to collect a payout. In hundreds of cases, expert witnesses have testified that the test provided evidence that plaintiffs were lying about their injuries, just as suggested by the test's colorful name: the Fake Bad Scale.
Use of the scale surged last year after publishers of one of the world's most venerable personality tests, the Minnesota Multiphasic Personality Inventory, endorsed the Fake Bad Scale and made it an official subset of the MMPI. According to a survey by St. Louis University, the Fake Bad Scale has been used by 75% of neuropsychologists, who regularly appear in court as expert witnesses.

But now some psychologists say the test is branding as liars too many people who have genuine symptoms. Some say it discriminates against women, too. In May, an American Psychological Association panel said there appeared to be a lack of good research supporting the test.

In two Florida court cases last year, state judges, before allowing the test to be cited, held special hearings on whether it was valid enough to be used as courtroom evidence. Both judges ended up barring it.

"Virtually everyone is a malingerer according to this scale," says a leading critic, James Butcher, a retired University of Minnesota psychologist who has published research faulting the Fake Bad Scale. "This is great for insurance companies, but not great for people."

The test asks a person to answer true or false to 43 statements, such as "My sleep is fitful and disturbed" and "I have nightmares every few nights." Someone who suffers from, say, post-traumatic stress disorder might legitimately answer "true" to these questions. But doing so would earn the test-taker two points toward the total of 23 or so that marks a person as a possible malingerer.

Other test statements are "I have very few headaches" and "I have few or no pains." These are false, someone who has chronic headaches would say. Again, those replies would incur two more points toward a possible assessment as a malingerer.

About a third of the questions relate to physical symptoms; there are questions about stress, sleep disturbance, and low energy. There is also a batch of questions related to denial of bad behavior. For instance, those who answer false to "I do not always tell the truth" get a point toward malingering.

Measuring Process

Paul Lees-Haley, the psychologist who created the test, say that while individual items "can be made to seem like evidence for a flawed" measuring process, what's important is the total score. He says the scale has "been tested empirically and shown to be effective."

Dr. Lees-Haley says criticism is being orchestrated by plaintiffs' lawyers. One, Dorothy Clay Sims in Ocala, Fla., has written guides for other plaintiffs' lawyers on how to challenge the Fake Bad test. She is leading an effort to reverse the decision that incorporated it into the Minnesota Multiphasic Personality Inventory, which is used in diagnosing and treating patients at mental-health facilities and in screening people for sensitive jobs like law enforcement.

Dr. Lees-Haley himself once testified frequently for plaintiffs in personal-injury lawsuits, but about 18 years ago he began to work mainly for the defense side. He says he devised his test because he saw so many claimants he believed to be faking mental or other distress, and existing tests didn't spot them.

Working for litigants is Dr. Lees-Haley's main source of income. He has said in court cases that 95% of this work is on behalf of the defense. He charges $3,500 to evaluate a claimant and $600 an hour for depositions and court appearances, his fee schedule says.

Dr. Lees-Haley didn't dream up the 43 true-or-false statements in the Fake Bad Scale. He picked them from among the more than 500 true-or-false statements in the elaborate, decades-old MMPI.

He tested responses to the 43 questions on three groups. One was personal-injury litigants he said were malingering. A second group was people he asked to answer as if they were trying to fake emotional distress resulting from a car accident, toxic exposure or employment. A third group consisted of litigants he said had actually been injured.

The known fakers averaged a score of 27.6 on the Fake Bad Scale; those who had been instructed to try to fake emotional distress averaged 25; and the truly injured litigants averaged only 15.7, Dr. Lees-Haley wrote in a research report.

He also compared the scores with those of two large groups who had taken the MMPI; both averaged below 20.

Dr. Lees-Haley concluded that his test "appears to be a promising procedure" for detecting malingerers, and posited that anyone scoring over 20 tended toward fakery. He paid to have the results published in a small Montana-based medical journal, Psychological Reports, in 1991. Use of his Fake Bad Scale in litigation slowly grew.

It recently figured in the case of Steven Thompson, a onetime truck driver in Iraq for the KBR unit of Halliburton Inc. He said he hadn't been able to hold a job since returning to the U.S. in 2004. Two doctors concluded Mr. Thompson had "chronic" and "fairly severe" post-traumatic stress disorder. He filed a disability claim that was denied by the insurer of Halliburton's since-sold KBR unit.

Mr. Thompson appealed to the U.S. Labor Department, which has jurisdiction in such cases. He testified that memories of attacks on his convoys, seeing dead bodies and smelling burning flesh led to nightmares and sleeping problems that left him too irritable and difficult to work with to hold a job.

A psychiatrist hired by the defense, John D. Griffith of Houston, concluded Mr. Thompson was exaggerating his symptoms, and cited his score of 32 on the Fake Bad Scale. A Labor Department administrative-law judge denied Mr. Thompson's claim, citing the test results along with inconsistencies in his testimony. Mr. Thompson is appealing.

Dr. Griffith won't discuss the case but says the Fake Bad Scale is helpful in confirming fakers, who he estimates make up 40% of personal-injury plaintiffs.

In seven prior cases where Dr. Griffith worked for KBR or its insurer, he found five of the claimants to be malingering, court records show. Asked about the high percentage of Iraq truck drivers he found to be faking, he said: "When you come back to the States, you suddenly discover if you are sick you can make more money than if you were working."

Cutoff Score

Dr. Butcher and some other researchers published a report critical of the Fake Bad Scale in 2003. They looked at more than 20,000 people, including several thousand psychiatric inpatients, who had taken the MMPI and calculated their Fake Bad Scale scores by checking their replies to the scale's 43 questions.

More than 45% of psychiatric inpatients had Fake Bad Scale scores of 20 or more, meaning they were possible fakers, under Dr. Lees-Haley's original cutoff score. Using a higher cutoff score, 24, the researchers still found that 23% of people were flagged as possible malingerers. In every subgroup, women had much higher scores than men.

The authors argued it was unlikely that so many psychiatric inpatients could or would have fooled doctors into diagnosing and admitting them to hospitals. It concluded that the Fake Bad Scale generated an "unacceptably high" rate of false verdicts of malingering, and also that it was biased against women.

Says Dr. Lees-Haley: "One of Dr. Butcher's primary strategies for criticizing the FBS is to apply it to groups for which it was never intended, and then complain that it isn't appropriate. Of course not. The FBS was designed for personal-injury claimants."

In 2006, the publishers of the Minnesota Multiphasic Personality Inventory took a look at the Fake Bad Scale. Those who take the MMPI receive scores on various categories, such as paranoia, depression and social introversion. The question was whether to make the Fake Bad Scale one of these scored categories as well.

The University of Minnesota Press convened a panel of eight experts and pointed to two published reports for them to consider. One was a book chapter partly written by Dr. Lees-Haley himself. The other report was a review of existing research, concluding that the "preponderance of the current literature" supports the use of the test in litigation.

The review of existing research ended up looking at 19 studies, at least 10 of which had been done by Dr. Lees-Haley or other psychologists who do work for insurance companies. The review had excluded 21 other studies from consideration, including the negative analysis by Dr. Butcher's team.

Dr. Butcher, a member of the advisory panel, opposed adding scores of the Fake Bad Scale to the results that are reported when a person takes the Minnesota Multiphasic Personality Inventory. Six of the eight panelists approved, although they differed on how the test should be used and what cutoff scores were appropriate. The University of Minnesota Press then did make the Fake Bad Scale a subset of the MMPI.

A few months later, the American Psychological Association's committee on disabilities protested to the publisher that it had acted prematurely. The APA committee later said it hadn't evaluated the test itself, but noted that the test was controversial and said: "Any test that over predicts malingering in persons with disabilities may result in their being denied necessary and due compensation, benefits or treatment." The committee asked the MMPI publisher to have the Fake Bad Scale reviewed by a group at the University of Nebraska that specializes in evaluating psychological tests.

The University of Minnesota Press didn't respond to a call. But in a letter to Ms. Sims, the Florida plaintiffs' lawyer, a lawyer for the university said it "recognizes that the FBS is the subject of significant debate in the academic and professional community.... The University believes that the process leading up to the FBS' release was sound."

Courtroom Test

The experts' disagreement spilled over into the courtroom in a case brought against a Florida gasoline carrier, Strawberry Petroleum Inc. Lloyd Davidson was sitting at a stoplight in May 2004 when his pickup was rear-ended by one of the gasoline company's loaded tanker trucks, sending the pickup crashing into another truck ahead of him. His lawsuit said his head shattered the rear window and he ended up with diminished mental capacity and symptoms of depression and inattention.

A psychologist hired by the defense said in a deposition there was reason to believe Mr. Davidson was faking. The witness cited his "very high" score of 31 on the Fake Bad Scale.

Before the expert could testify at the trial, held in Hillsborough County Circuit Court, the plaintiffs moved for a hearing on the scientific validity of the Fake Bad Scale. Judge Sam Pendino ruled in June that "there is a genuine controversy surrounding use of this test" and "no hard medical science to support the use of this scale to predict truthfulness." He said that drawing conclusions from a test that gives points for malingering when a plaintiff gives honest answers to questions based on actual injuries "has no place in this courtroom."

In January, a jury determined that Mr. Davidson had suffered a permanent injury from the crash and awarded him $1.4 million from the gasoline carrier.

Words of Thanks

Angel Reyes — Thu, 21 Feb 2008 18:47:56 -0600

My law firm, Heygood, Orr, Reyes, Pearson & Bartolomei has received numerous letters of thanks from clients. We greatly appreciate all of our clients, and we thank them in return for their business and continued loyalty in allowing our firm to represent them.]]> REMOTE MONITORING TECHNOLOGIES

I want to thank you for the hard work and determination required from all involved to make this win happen. I know it wasn’t easy. Thank goodness I was naïve and didn’t know how difficult the process would truly be until I was in too deep to let go. You presented my case in a manner the jury could relate to. Thank you.I want to specially thank you for all of the hard work and long hours. With over 20,000 pages of documentation it was no small task. You deserve a tremendous amount of credit for making this happen. To all concerned; from a business standpoint, I know sometimes you may have wondered if it was worth your effort and the resources expended; I am happy it was. (I told you it would be!) I was impressed by the camaraderie of your firm. It was heartening to see Angel in the back of the courtroom each day. I appreciated the presence of all those who attended the trial and offered Kathryn and me moral support. We were outnumbered and needed it. I know there is more work to do but I don’t feel like I am alone in the process.
- Tony Alardin; Remote Monitoring Technologies

INDIVIDUAL
I know I am "small potatoes" for you all but I sure do appreciate you representing me. If I ever need anyone again, you know I will be calling on you. You restored my faith in people and my trust in your profession Thank you. Also, I appreciate the time you took to answer my questions and update me on things. Thank you!
Mary K. Breiske; Special Education Teacher

AUTO LINK DALLAS
"My company has been in business for over 20 years. We specialize in selling luxury automobile lines, such as Ferrari, Lamborghini, Bentley, Rolls Royce, Porsche and others. We became involved in a lawsuit with a major boat manufacturer that involved the breach of a very large contract. We turned to Heygood, Orr, Reyes, Pearson & Bartolomei because they came highly recommended. They got results we could only have dreamed about, especially after we interviewed several large Dallas law firms, who gave us both a big estimate of costs and low chances of recovery. We are fortunate to have this law firm at our side as they now handle every piece of litigation, large or small that our company gets dragged into."
- Khaled Chami - President & Owner; Auto Link Dallas

INDIVIDUAL
"I was involved in a head on collision which caused me extensive bodily injuries. I turned to the attorneys at Heygood, Orr, Reyes, Pearson & Bartolomei and they got me an amazing result. They suggested that I structure the money I was awarded and for over 10 years now, I've been able to pay for my ongoing medical care. Without the help of my attorneys at HORP&B, my life would be materially worse."
- Darrel Dennison, Client

MORGAN & MORGAN
"I own the largest personal injury law firm in Florida, Morgan & Morgan. When I have a case in Texas I automatically call my friends and colleagues at Heygood, Orr, Reyes, Pearson & Bartolomei because I know they will do outstanding work, provide excellent client service, and get my clients results."
- John Morgan, Managing Partner; Morgan & Morgan

CRUISEREPORT.COM
"I started a small internet based travel company and it grew by leaps and bounds. As my company grew, I found myself in need of financial partners to support the growth. One day I woke up and discovered that my new partners were attempting to throw me out of my own company. I turned to HORP&B and they were able to immediately obtain an injunction against the individuals trying to take my company and within 6 months negotiated a very lucrative settlement which I used to start a new company (CruiseReport.com) which has been equally as successful as my previous company."
- Chris Dikmen, President; CruiseReport.com

LAW OFFICES OF VIRGIL ROGERS
"I have been a lawyer in Dallas County for over 40 years. I have had occasion to work with plenty of high powered law firms over the span of my career. The best results I ever obtained for a client of mine were obtained by HORP&B and I can't say enough about their work. They were smart, tenacious and professional. They changed the life of my clients (an entire family) forever. Along with that family, I will forever be grateful I called upon HORP&B to handle the matter."
- Virgil Rogers, Law Offices of Virgil Rogers

Can Access to Credit Cure the Recession Worry Blues?

Angel Reyes — Wed, 16 Jan 2008 17:37:24 -0600

2008 is shaping up to be a blockbuster year for the U.S. “It's the economy, stupid,” will be repeated by every man and woman running for President, or for that matter, local librarian. So, what can the politicians do to help out the regular Bobs in this country? How about letting manufacturers and retailers open their own financial institutions? Why? Because in 2008, the U.S. is a country where credit channels and access matter more than ever.

Let's do a quick review of the past 60 years of credit access. In 1940, if you could qualify for a mortgage, and the pool of qualified borrowers was very small, you had exactly 5 years to pay off the mortgage. Fortunately, the inventive and creative financial wizards at the big banks and Wall Street houses figured out a way to bring mortgage products to the masses; make the loans for 15 or better yet, 30 years. Pow, the U.S. Housing industry was off to the races.]]>University of Michigan Law School.

Remember car loans in the 1980s? For a used car, typically the buyer had to pay in full in cash; if the car was barely used, the buyer might have been able to wrangle 24 months of financing. Today, Mercedes Benz credit will stretch some loans out over 8 years! So the march towards better living has been fueled by the access to credit channels by an ever-increasing and widening pool of borrowers.

Wal-Mart tried to open up an Industrial Loan Corporation but was beat back by entrenched banking groups who didn't want the competition. Maybe it’s time to rethink the Wal-Mart application. After all, if Wal-Mart will finance it, lots of people will buy, don't you think?

I know, I know, the naysayers will claim that Americans are sinking under a pile of debt and will be doomed to be paying finance charges for life. Duh!

The quant guys on Wall Street will figure out a way to put credit back into the hands of even the riskiest borrowers; it is only a matter of time. Oh yeah, this is a political year, we don't have any time.

See the recent article by Lawrence Lindsey, CEO of the Lindsey Group. That article touches on some of these same ideas.

The State of the Stimulus Debate
By LAWRENCE B. LINDSEY
January 16, 2008; Page A13
The odds that the American economy may encounter a recession this year have risen. And the odds that it might be longer and deeper than recent recessions are significant.

As the Federal Open Market Committee noted in the minutes of its December meeting, the biggest risk comes from a feedback developing between the availability of consumer credit and rising, recession-induced increases in credit defaults and delinquencies. While they will help over the long term, even rate reductions by the Federal Reserve will take time to have their salutary effects.

To be most effective, government action should aim directly at counteracting this feedback loop, and not simply throwing money at key constituencies and feel-good programs. For instance, Sen. Hillary Clinton's newly unveiled stimulus proposal does nothing to address the breakdown of consumer finance. Instead it gives money to states for housing assistance, and increases unemployment compensation and low-income energy assistance.

Moreover, the money will be expended much too slowly to have much economic effect. The centerpiece of her plan -- the Emergency Housing Crisis Fund -- would transfer money to states, taking precious time, which would then transfer money to local housing authorities, taking more time, which would then identify vacant housing properties to buy up, taking even more time, which would then rent them to working families, completing a long chain of bureaucratic action at three levels of government.

Mrs. Clinton's plan is also very political: Witness the promise that her new weatherization program would cut home energy costs by 20% this winter. It is almost impossible to pass a new program before the end of winter, which is already one-third past, much less implement one.

A middle-class tax cut involving a reduction in the lowest rate and an increase in the child credit would at least provide money to the right people, and could be implemented much faster than new government programs. But even a $1,000 check will not induce a middle-class family to use the cash for a down payment on a car if they can't get an auto loan to close the deal. This is why any solution must also focus on fixing the breakdown in consumer finance.

The government should facilitate the opening of new credit channels through which capital for consumer financing might flow. The existing securitization process has broken down for consumer credit, and this breakdown is what's starving the consumer sector of funds. Good quality auto loan paper has risen more than four percentage points in yield; securitization of consumers with even somewhat questionable credit has become nearly impossible.

One of the easiest things to do would be to allow manufacturers and retailers to open their own financial institutions, through which they could borrow and lend money. One such institution, the Industrial Loan Corporation (ILC), exists in limited form expressly for this purpose. Unfortunately, the union-led assault on Wal-Mart has caused the FDIC to place a moratorium on the approval of such institutions. Some existing financial groups who fear the potential competition have joined forces with the unions. Bad timing caused auto-company finance arms to be caught up in this political dispute as well.

These institutions could be limited to special purpose lending -- such as in-house credit cards or consumer installment loans like car loans. They are obviously subject to safety and soundness regulation as are other financial institutions. It is hard to see how either the taxpayer or the banking insurance system would be better off by blocking one of the few remaining potential consumer credit channels that remain, thereby risking a consumer-led economic recession.

In the interest of disclosure, I doubtless have a number of clients who would benefit directly from such a move. Indeed, nearly every manufacturing company and retailer that relies on consumer credit to move its product would be a potential direct beneficiary. But consumers, who would have their access to credit restored at reasonable rates, would also benefit, as would the workers who produce the goods these consumers would buy.

As Washington looks around for ways to stimulate the economy, it is ironic that politically-motivated regulatory inaction is a primary cause of our current problems.

Reopening the credit channels is a necessary condition for staving off a consumer-led recession, but it is probably not sufficient by itself. So, while Keynesian-style short term stimuli are usually not as effective as permanent rate reductions at stimulating the economy, given the deterioration in consumer balance sheets, some fiscal help might prove quite beneficial.

In 2001, President Bush quickly delivered tax rebate checks based on a new 10% tax bracket. A temporary suspension of revenue from this tax bracket could essentially give $1,500 to every married couple that pays taxes and $750 to every single taxpayer. Coupled with a temporary $500 increase in the child credit, middle-income families would enjoy a significant increase in their household incomes, roughly the equivalent of two-and-a-half weeks' take home pay for a four-person family.

Longer term, fundamental tax reform remains the most sensible way of strengthening the American economy. The cumbersomeness of the current system, and the political inability to cope with it, reached truly embarrassing levels last year when Congress took more than 11 months to come up with an economically vital one-year patch to protect millions of taxpayers from liability to the Alternative Minimum Tax.

Our economic performance is increasingly being held to political ransom, as evidenced by the failure of the current Congress and the ad hoc nature of the so-called "stimulus" packages put together so far. The collateral damage caused by special-interest efforts like the anti-Wal-Mart campaign is further evidence that we are sliding in the wrong direction. While deregulation and tax simplification are not currently in vogue, ultimately they represent the best type of economic stimulus -- by allowing the people who actually create the jobs and wealth of this country to get about their business.

Mr. Lindsey is president and CEO of the Lindsey Group, and author of "What a President Should Know . . . But Most Learn too Late" (Rowman & Littlefield, 2008).

Want To Go To Law School?

Angel Reyes — Wed, 31 Oct 2007 15:03:46 -0600

It appears that all is not lost on the law school front. As a follow-up to my article about why there are no University of Houston law graduates at Cravath, Swain & Moore, I wanted to pass along a recent Wall Street Journal article. The article contains some great advice for folks considering what law school to attend. I recall one of my college professors telling me how fortunate I was to be accepted at schools like the University of Michigan, Cornell, etc. I remember looking over the list of top schools and I figured my choices were a lot like having to choose between kissing Miss America and kissing Miss Universe; no choice was going to suck. Since not everyone has such choices, what do you do? Take my college professor's advice: Go to the best school you get into, unless it is not in the top 20 rankings. If you don't get into a top 20 school, go to the cheapest school in the geographic area of the country in which you see yourself living. It's really that simple. The entire article, which contains some great advice, is attached below:]]>How to Cut Debt, Boost Job Prospects From Law School
By AMIR EFRATI
October 30, 2007; Page B1

Mike Doty landed a six-figure job this fall as an associate at a big law firm in Minneapolis because of a smart move: The University of Chicago Law School graduate had performed so well at a second-tier school in Cleveland that he was able to transfer to Chicago after his first year.

Many of the friends Mr. Doty left behind in Cleveland graduated with no jobs and a lot of debt. "Law school is definitely a huge financial mistake for a lot of people," he says. "Schools are asking consumers to spend upwards of $100,000 on a product, and there's nobody out there giving them the information they need to make an informed decision."

Law-school application season has begun, and prospective students have a lot at stake as they choose among schools. Many recent law-school graduates who don't work at big firms are struggling to pay off student loans in an increasingly tough job market. The legal sector has grown at an average annual inflation-adjusted rate of 1.2% since 1988, or less than half as fast as the broader economy, according to Commerce Department data. While the top firms have prospered, leading to ever-rising salaries for new lawyers there, studies suggest salary growth elsewhere has stagnated.

In this environment, how can a prospective student choose a school that offers the best chance of landing a good job? Prospective students are applying to more schools: For the 2006-07 academic year, applicants filled out an average of six applications, up from 4.7 for the 2002-03 academic year, according to the Law School Admission Council. But many schools' data on graduate employment prospects paint a rosy picture that is sometimes less than reliable. And relying strictly on widely publicized rankings can be a mistake, experts say.

ELECTRONIC DISCOVERY

Useful sites for prospective law students:
• http://officialguide.lsac.org
'Official guide' to American Bar Association-approved law schools, with searchable data
• http://www.abanet.org/legaled/statistics/stats.html
ABA legal education statistics
• http://www.leiterrankings.com/
Leiter's law-school rankings
• http://www.lawclerkaddict2008.blogspot.com/
Ranks schools by percentage of class that gets prestigious federal appeals-court clerkships "If you go to a school ranked 35th or 40th over one that's ranked 70th or 80th, you are by no means substantially increasing your chances of landing a high-paying job," says Bill Henderson, a law professor at Indiana University-Bloomington who studies the legal job market. For one thing, the talent pool at a higher-ranked school is generally deeper, making it harder to perform better than your classmates -- a must if you want a chance at a big-firm job.

For students aiming for the private sector, here are some tips to help identify the law schools that will provide the best job opportunities and do the least damage to your bank account.

• Consider an in-state public law school: Unless you've been accepted at a nationally recognized top-tier school, where getting a job is easier regardless of your grades, think hard about minimizing cost. Over the past 20 years, law-school tuition increases were nearly triple the rate of inflation, and in 2006, graduates of public and private law schools had borrowed an average of $54,509 and $83,181, respectively, up 17% and 18.6% from the amount borrowed by graduates in 2002, according to the American Bar Association. An in-state public law school costs about half as much, on average, as a private school or a public school for out-of-state residents.

The "Official Guide to ABA-Approved Law Schools," available online at officialguide.lsac.org, has a mountain of searchable statistics, reported by each of the nearly 200 ABA-accredited schools, including what percentage of students get aid or tuition discounts. At the University of Iowa, for example, 22% of students in the 2005-06 academic year didn't pay any tuition. (Most schools make some scholarships contingent upon the student's staying above a certain class rank.)

The ABA guide also includes information on what percentage of students at each school drops out because of poor academic performance, the number of students involved in law journals -- a big plus for your résumé -- and the bar-exam passage rate for graduates.

• Be a big fish: If your law-school admissions test score doesn't qualify you for admittance at the top 20 to 30 schools ranked by U.S. News & World Report in its annual law-school rankings and your goal is a high-paying law-firm job after graduation, consider going to the school where you will get the biggest tuition discount and where you will be among the top incoming students. That will increase your chances of being ranked at the top of your class (most law schools grade on a curve), making you more attractive to employers. The ABA guide includes information on the academic profile of schools' incoming students, including the median LSAT scores and undergraduate GPAs.

• Ask about on-campus recruiting: Many employers consider only the top-ranking students, based on their first-year grades, for interviews for the summer-associate jobs that are the path to full-time employment upon graduation. Ask the school and second-year students what percentage of the class gets interviews with the big law firms that offer the highest starting salaries. At New York Law School, ranked in the bottom half of schools by U.S. News, most big firms will interview the top 5% to 15% of students, says the school's dean, Richard Matasar; at highly rated Columbia Law School, also in New York, the vast majority of students are courted by big firms.

Some top schools, such as the University of California-Los Angeles, have a lottery-based system that matches students with employers for on-campus recruitment events and doesn't allow employers to preselect students based on factors such as GPA. But some firms still won't seriously consider offering jobs to students with GPAs below a certain level.

• Look for transfer opportunities: Another perk for big fish: Elite schools are increasingly plucking the best students from lower-ranked schools, administrators say. The top 11 schools in the U.S. News survey had a net gain of about 260 transfer students for the 2005-06 academic year, according to data in the ABA guide, which this year reported those figures for the first time.

Find out if a school that has accepted you is a feeder for elite schools in the region by contacting those schools' admissions offices. For example, UCLA, ranked 15th in the latest U.S. News survey, had a net gain of 35 transfer students two years ago. The school says some transfers come from local second- and third-tier schools, including Loyola Law School and Southwestern Law School, both in Los Angeles. Note of caution: Short of transferring into one of the very top schools, the near certainty of getting a high-paying job opportunity after a transfer starts to fade.

• Check alternative law-school rankings: Rankings published by U.S. News are dominant in the industry, but they reveal few details about graduates' employment prospects. Some schools greatly outperform their U.S. News rank in placing students at the highest-paying firms or in prestigious federal appeals-court clerkships.

A handful of alternative rankings have proliferated online in recent years to satisfy the growing demand for measuring employment outcomes of law graduates. Brian Leiter, a law professor at University of Texas-Austin, for example, posts lists on www.leiterrankings.com ranging from Supreme Court clerkship placement to the scholarly reputation of schools.

In the spring, Prof. Henderson of Indiana and another law professor are expected to publish a new ranking in the legal trade publication National Law Journal showing what percentage of a school's class got jobs at the nation's 250 largest law firms.

• Scrutinize schools' data on graduate employment: Most law schools try to keep track of where their graduates end up and what their salaries are, but some schools are more forthright than others. When schools report that a certain percentage of their students were employed nine months after graduation, the figures can include nonlaw jobs or jobs for hourly wages. Some schools' salary data are heavily based on their most successful graduates who made it to big firms. Don't rely on the salary figure unless it's based on a high percentage of graduates who reported their salaries to the school. (Those percentages can be found in the "career prospects" section for individual schools in the "online premium edition" of U.S. News's latest graduate-school rankings. It sells for $14.95 at www.usnews.com, under "rankings.") And schools often include lawyers working on a contract basis in their figures, even though those jobs often don't offer significant career-growth potential.

• Think about location: Unless a school is nationally recognized, it's tough to take its degree to firms on the other side of the country. In fact, in at least half of all states, at least 60% of graduates got an in-state job, according to the National Association for Law Placement, in part because most employers are more familiar with schools in their region. So sometimes it makes sense to go to a lower-ranked school if it's located in the market where you want to work. Ask the school for a detailed breakdown of where last year's graduates got jobs.

Write to Amir Efrati at amir.efrati@dowjones.com

©2007 Angel Reyes
www.ReyesLaw.com

Tech Titans Lose Tax Shelter Fight With IRS

Angel Reyes — Tue, 06 Mar 2007 10:01:57 -0600

Few people remember John Doerr’s failed MyCFO, Inc., except the unfortunate folks who got suckered into using the firm and its tax shelter strategies. The tax shelter strategies that MyCFO used were the result of the usual coalition of a “silk stocking” law firm partner, a partner from an investment bank, partner from a big Four accounting firm, and super rich clients who didn’t want to pay taxes on their newfound wealth.]]>

James Clark, Co-founder of Netscape
John Chambers, CEO of Cisco Systems
James Barksdale, former CEO of Netscape
Tom Jermoluk, former CEO of Excite@Home
Larry Sonsini, partner with Wilson Sonsini
Roy Hahn, owner of Chenery Associates
Graham Taylor, then partner with LeBoeuf, Lamb, Greene & McRae
Raymond Ruble, then partner with Brown & Wood later absorbed by Sidley & Austin
Bankers from Deutsche Bank AG and Bayerische Hypovund Vereinsbank AG.

Here’s how it worked. MyCFO sold its clients a tax shelter strategy called Cards. Cards was the acronym for Custom Adjustable Rate Debt Structure. My CFO would acquire ostensible 30-year bank loans to a foreign party for, say $50 million to $100 million. A super rich client of MyCFO, one who presumably was coming into a massive capital gain situation, would assume the loan and, after some complicated collateral swapping, would claim a loss for tax purposes for all or nearly the entire loan. Not surprisingly, the IRS invalidated the strategy. The IRS claimed the strategy failed a basic test for legitimacy: it lacked any real economic purpose other than to lower taxes. The IRS believed that the clients who used this tax shelter strategy were never really at risk for the ostensible $50 million or more in loans.

So, how did so many smart people, well at least rich people, get sold this tax strategy? The typical way, they relied upon the lawyers at LeBoef, Lamb and Brown & Wood’s tax opinions. Tax shelter strategies always rely upon an opinion written on the letterhead of a reputable, or at least well known (read big time multi-state/national law firm), that states the strategy is kosher. In essence, according to Kevin McAuliffe, an accountant formerly with MyCFO, MyCFO and its clients, essentially bought their opinions and comfort level. The opinions cost hundreds of thousands of dollars but yielded tax savings of millions for participants.

Similar tax shelter opinion letters have taken down major law firms. In my hometown of Dallas, the law firm of Jenkens & Gilchrist, once the largest law firm in the City, will shut its doors at the end of this month. Jenkens got caught up selling tax shelter opinion letters and was sued by dozens of clients. To the credit of the firm’s partners, they all hung in the fight until most or all of the resulting litigation pending against the firm resolved.

Heygood, Orr, Reyes & Bartolomei handles complex commercial litigation cases, business litigation, civil litigation, personal injury, dangerous drugs, defective products, wrongful death lawsuits and more.

©2007 Angel Reyes
www.ReyesLaw.com